There are winners and losers from the recent fintech marketing shakeup in the financial services sector. The key is putting your customers first as we delve into the latest trends and innovations in the finance landscape
Financial Services marketers are working amidst an era of digital disruption. Those based in traditional financial services businesses are witnessing rapid digital change, whilst new digital startup marketers are looking for fast growth and shaking up the marketplace. On both sides of the spectrum, it is agreed that financial services martech and fintech marketing unlock great opportunities to get closer to customers when done well.
Smart Insights helps marketers and managers in a range of financial services businesses. We have dedicated startup and SME marketing tools and templates, plus full-team integrated marketing training for large global corporations. One marketing principle that rings true for all financial services marketing activities is ensuring a keen focus on the customer throughout your marketing planning.
Financial services and fintech marketing are rooted in consumer trust and values. Coined as 'your money or your life', marketing that influences your customers' 'happiness, health, safety, or financial stability' comes with increased responsibilities and implications for the whole of your marketing strategy. Our popular RACE Framework empowers financial services marketers to break down each stage of their customers' lifecycles, identify strengths and weaknesses, and find new opportunities to achieve their goals.
Our financial services marketing trends report breaks down the latest 9 innovations in the financial services sector, across our lifecycle of plan - reach - act - convert - engage. Download your free copy of the report today to discover new opportunities to acquire and retain more high-value customers for your business.
What is fintech?
Fintech is a combination of technology and financial services that’s transforming the way financial businesses operate, collaborate, and transact with their customers, their regulators, and others in the industry.
All types of companies, from startups and tech companies to established firms, are using fintech. In recent years, many variations of fintech have emerged that draw on cutting-edge technologies specifically tailored for certain sectors or functions within the financial services ecosystem, such as regtech and insurtech.
In their Global Fintech Report 2019, PwC identified a number of technologies that respondents felt would impact on the way financial services are delivered. In this report, we will focus on the way marketers can use these technologies to support customer acquisition and business growth in an increasingly challenging industry.
Insurance in uncertain times
Over the past five years, the insurance industry has undergone unprecedented change resulting from innovation in big data, artificial intelligence, cloud computing, and blockchain. In a 2019 report, KPMG highlighted the need for insurers to pursue technological-based transformation and focus on digital customers.
AI-driven customer service can improve efficiency in terms of sales and claims processing and the use of predictive analytics is shifting the focus of underwriting from risk pooling to individualized products and pricing. All of this can allow insurers to offer premium discounts to policyholders based on their behaviour and lifestyle needs.
Investment in the insurtech sector continues to grow, with reinsurance giant Willis Towers Watson, estimating the total new worldwide funding commitments to the insurtech sector in 2021 to be $6.4 billion.
What is insurtech?
Insurtech, much like fintech, broadly refers to the use of technology to fundamentally transform traditional insurance business models. Insurtechs have several advantages over more traditional insurers, such as their ability to scale quickly, launch products fast, and employ top tech talent.
In order to compete, traditional insurers need to focus on four main areas: customer acquisition, data and analytics, state-of-the-art technology, and talent.
The impact and implications are probably best summed up in this quote by a Relationship Management Director/SVP at a large insurer from the UK who said:
“Regulatory and capital barriers to enter the insurance industry limit the impact of ‘standalone’ Fintechs. However, the marriage of Fintech capabilities with a backer who brings in capital, regulatory fit and a recognised brand would be transformational for the sector.”
How are insurtech and fintech marketing powering digital disruption?
According to PWC's Financial Services Technology 2020 and Beyond: Embracing disruption report, additional trends that we are likely to see include:
- Fintech driving the new business model
- The sharing economy embedded into every part of the financial system
- Digital becoming mainstream
- Customer intelligence as the key predictor of revenue growth and profitability
- Re-shoring and localization owing to advances in robotics and AI
- The public cloud as the dominant infrastructure model
- Cybersecurity as the top risks facing financial institutions
- Asia will be the key centre for technology-driven innovation
Furthermore, in order to succeed, financial organizations should:
- Update their IT operating models
- Simplify legacy systems beyond the cloud and adopting robotics/AI
- Build technological capabilities to be more intelligent about customer needs and wants
- Prepare architecture to connect to anything and anywhere
- Pay vast attention to cyber-security
- Have the talent and skills necessary to drive their strategies forward
These findings are particularly pertinent for fintech marketing leaders, as both technology and skill-building require strategic investment, which should not be done lightly.
Our financial services marketing trends report walks you through best practice theory, real-life case studies, and our recommended next steps for implementing 9 top trends to optimize your marketing strategy and win more customers.
Emerging technologies for global financial services
Whilst compiling our financial services marketing trends report, two areas of emerging technologies stood out as being particularly important for those in fintech. Blockchain, a digital financial process development that grew in popularity during the pandemic, unlocks unprecedented opportunities for team efficiencies and new international market expansion. Share dealing platforms, such as easy-to-use investment banking apps, break down barriers to share dealing, enabling banks to reach and convert more investors.
In terms of emerging technology to watch out for over the next couple of years - I recommend keeping an eye on AI, martech, personalization and UX/CX optimization, as well as the other technologies mentioned above. These developments can not only help you reach a larger audience but also generate new revenues, leads, and conversions in the coming year.
Fintech blockchain developments
Blockchain is a technology that was initially developed for Bitcoin, the cryptocurrency, but interest exploded when it became clear that it could be used by financial services companies for a range of business-critical services such as the transfer of any digital assets, recording the ownership of physical and intellectual property, and establish rights through contracts and creating huge transaction efficiencies.
It is predicted that blockchain technology will open up opportunities for the unbanked or underbanked to gain financial inclusion. The high numbers gaining financial inclusion (access to financial products and services) will come from the increased adoption of mobile banking, driven by the implementation of blockchain technology.
There are large markets available to Fintech companies that are looking to increase those who are financially included. While there may be a degree of altruism driving Fintech application development geared towards increasing financial inclusion, the real motivator is the size of the market.
Blockchain technology will increase mobile banking adoption outside of the high growth areas whereby it currently holds the most market share. Cryptocurrency is volatile and there are uncertainties relating to its viability as a store of value, so it is unlikely that it will be a mainstay in the markets. Blockchain, on the other hand, provides unbanked customers with a verifiable and easily created online identity, enabling increased financial inclusion.
Fintech share dealing developments
Another technology increasingly popular with retail investors is the emergence of digital share dealing platforms. Revolut, a British digital-only bank, introduced a commission-free trading platform in 2018 on its mobile app, providing its customers with fee-free share trading. Customers, who can already use the app to control their finances and spend abroad with minimal fees, can now utilize the app to invest in stocks from US and British companies, as well as to exchange-traded funds and options.
The company is using technology to undercut traditional financial services organizations, generating income from premium subscriptions, providing perks to paying customers, as well as margin trading, securities lending, and interest on cash held.
The company’s aim with this development is to remove the barriers of investing, including complicated registration processes, complex interfaces, and high costs.
The ability for customers to buy and sell listed stocks in seconds via its mobile app and without paying commission pits it against the investment platforms of established financial services groups such as Hargreaves Landsdown, Barclays, and Close Brothers.
With half of savings accounts now paying less than inflation, retail investors will increasingly seek new alternatives to invest their savings. Digital share dealing continues to grow in popularity as these platforms offer better more convenient options for retail investors and better savings rates for ISA. The evolution of smart tools and the wider adoption of artificial intelligence and machine-based learning will only increase innovation within digital trading platforms.
The easiest way to start offering some form of experience optimization is through A/B testing - and we recommend Google Optimize as it has proven to be a game-changer for many businesses out there lacking in dev time or know-how.
Google made their Optimize product free in 2017 in part as a response to a survey they ran that found that 45% of small and medium businesses don't optimize their website through A/B testing. The most common reasons given were a lack of knowledge to get started and a lack of resources.
Optimize allows anyone to make quick and easy changes on their site and A/B test their rollout against the original. All you need to do to set it up is add a single line of code to your site's HTML and then use the visual editor to make your changes. The streamlined approach makes it simple to make iterative improvements based on actual user interactions, and it can have a great impact on your site and company's performance. Our top tip, however, is to make as few changes as possible per test - that way you can be sure about the cause behind any increase or decrease in activity.
Choosing a high-value page to optimize (such as seen by users entering your site through a valuable PPC ad) will see the biggest dividends, as you can understand how moving a CTA around, using more or less content, or including testimonials, for example, can make an impact on how you perform at Act and Convert stages of the RACE Framework.
The future of fintech marketing
The Financial Services industry has witnessed significant fintech marketing developments over the past few years. Moreover, the sector will continue to change over the next few years.
We are also witnessing blockchain becoming an established technology and share-dealing targeting 'mainstream' audiences. It is very likely that fintech will continue to shake things up in years to come.
Customers are now demanding improved services, seamless experiences, and increased value for money. The pace of change shows no signs of slowing down, with business leaders in financial services (70%) stating that one of their biggest concerns was the speed of change in technology.
In the future, new companies will need to deliver financial services at a fraction of the cost, increasing the importance of effective core digital services, including design and UX, paid search, and SEO, social media performance, and mobile apps that continue to delight customers. We are likely to see partnerships with innovative Fintech startups and an increased focus on customer preferences – both stated and unstated.
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